East firms 'less upbeat'

BUSINESS confidence levels in the east of England are among the lowest in the UK, despite a rise in the last quarter, according to a survey.Levels of confidence in the region have risen to +1.

BUSINESS confidence levels in the east of England are among the lowest in the UK, despite a rise in the last quarter, according to a survey.

Levels of confidence in the region have risen to +1.9, the highest level since the second quarter of 2005, according to the latest UK Business Confidence Monitor from the Institute of Chartered Accountants and Orange.

Despite the increase, confidence remains significantly below the survey's Confidence Index of +6.2 for the United Kingdom as a whole this quarter.

“The region has failed to benefit over the past year from rising confidence in the manufacturing and engineering and the banking, finance and insurance sectors,” said Pippa Bourne, regional manager for Institute of Chartered Accountants.

“Rising unemployment and tight household finances have kept optimism subdued in the region. The marginal increase in confidence this quarter probably reflects the slight uplift in confidence in the retail and wholesale sector.”

Despite the subdued confidence in the region, finance professional expect turnover to accelerate to 6.8% in the next 12 months, compared to 4.9% in the previous 12 months and a similar growth in profits to 6.2%.

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The optimistic outlook on turnover is driven by expectations of faster sales volumes of 6.3%, an increase of 1.2% on last year.

Export growth is also part of the rise in confidence, with a predicted 1.9% rise in the next 12 months compared with the previous 12 months.

Shaun Orpen, small and medium enterprise director at Orange Business Services, said: “It is heartening to see confidence returning to the east of England. If, as finance professionals in the east of England expect, the increase in their selling prices is only 0.8% in the next 12 months, this is well below the Bank of England's 2.0% target for consumer price inflation and will only help to strengthen the region's economy over the next year.”

The Business Confidence Monitor is a quarterly tracker of business confidence in the UK, based entirely on the informed opinions of around 1,000 finance professionals.